Some investors reacted angrily after PlanB admitted that his stock-to-flow model failed to accurately predict the price of bitcoin (BTC) for November.
The popular crypto analyst aimed for a $98,000 BTC price for the end of this month. Just last week, he insisted the price target was still possible, even as markets declined.
PlanB correctly predicted BTC reaching $47,000 in August and $43,000 in September. He slightly missed the $63,000 target for October, but said the three percent “rounding error was close enough for me.”
Now the pseudonymous Dutch investor says that his $98,000 prediction for this month “will probably be a first miss,” according to a tweet posted on Nov 25. He did not give an exact reason for the failure.
“I see this miss as an outlier, a black swan, that has not occured in the data last 10 years,” he explained.
He spoke as the price of bitcoin tanked to $55,300 on Nov 23, down 20% from its record high of $69,000 reached on Nov 10. Some analysts are blaming the decline on fears of the impending Mt. Gox BTC repayments.
Bitcoin ‘stock-to-flow model still on track to $100,000’
PlanB, who claims 25 years of financial markets experience, is famed for creating the stock-to-flow (S2F) price prediction model. The model is based on the ratio of the current supply (stock) of an asset or commodity to its annual production (flow).
It can be applied to any asset with limited supply really, and the Dutch analyst did so with bitcoin in 2019. The idea is that since the bitcoin supply diminishes with every “halving” event every four years, it will create boom and bust cycles. He then uses these cycles to forecast prices.
PlanB explained that the missed November target relates only to the “floor model,” one of his three price prediction tools. Unlike the S2F, the so-called floor model relies on price and on-chain data, he says.
He insisted the stock-to-flow model had not been “affected and indeed [was] on track towards $100,000.”
Justin Stagner put the miss into perspective. “[It is] not like you just barely missed it either. I mean, its looking like you really blew this one,” he stated.
Some investors reacted angrily to PlanB’s admission of failure, blaming the crypto analyst for their financial losses.
“I used my student loans along with a short term loan using my house as collateral to go all in at $68k because you told me it would reach $98k. Now I’ll be homeless and without a degree…” complained Twitter user Brett Lethbridge.
Another lamented: “Now your stock-to-flow model is not reliable anymore. Most people incurred great losses because of your prediction.”
However, several other people replying defended PlanB, and even thanked him for his predictions. Often, they defaulted to a familiar refrain, a disclaimer of sorts, that his forecasts are “not financial advice. Do your own research.”
PlanB himself averred:
It is indeed absurd that when you publish information for free, somehow people make you responsible for their investment decisions and actions. Everybody is responsible for their own (investment) decisions and actions. Blaming others is a sign of immaturity: NGMI (not going to make it).
The Dutch analyst has faced criticism before. He’s often accused of adjusting his price predictions lower once it becomes clear that the S2F would miss its target, and be invalidated.
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